Key performance indicators (KPIs) are a commonly used mechanism to track performance in business, they are used for many reasons such as human resources, occupational health and safety and finance. They also have their uses in organisational environmental management, so in this post I thought we could look at how to apply them to environmental issues.
What are EPIs?
Firstly, to make things a little easier, I guess we could call environmental key performance indicators EPIs. It is useful to define what is meant by this term before we get further into the topic. A common definition of EPIs is a business tool for the measurement of performance that is quantified. Example EPIs might be; KWh of electricity consumed per square metre of floor space or tonnes of waste recycled per tonne of product. The EPIs are not objectives or targets themselves, but are often attached to these to help determine the status of compliance with an objective or target. If chosen correctly they give an accurate picture of environmental performance and as they are almost always numerical they allow performance to be tracked over many years.
EPIs are used in many situations from an environmental perspective, sometimes forming part of an environmental management system (EMS), corporate social responsibility reports or developed for legal reasons.
Types of EPI
A good standard to help with choosing suitable EPIs for a business is ISO 14031:2013. The standard provides guidance on three types of EPIs. The first is management performance indicators (MPIs). MPIs are a measure of the status of an organisation’s EMS. Having key metrics to track the performance of an organisations EMS is of high importance, after all it is poor management performance that is often the root cause of environmental issues. Example MPIs include the number of achieved environmental objectives or metrics associated with legal compliance.
Secondly we have operational performance indicators or OPIs, these are more traditional types of indicators and are usually linked to the significant environmental impacts of an organisation. Examples might surround issues such as fuel consumption per vehicle or weight of rejected products per tonne of production.
Finally, in ISO 14031 we have environmental condition indicators (ECIs) these are a measure of some part of the environment. Examples might pertain to air quality, water courses or climate change. They are rarely used by organisations (although I have come across them very rarely in environmental permits) and are often more relevant to government, regulators or research institutes.
EPIs may be absolute or normalised. Absolute indicators are those that express an overall total such as tonnes of waste sent to landfill. They can be useful, but they have a weakness in that they don’t necessarily express an organisations performance over time. In our waste example there might have been an increase in production that led to the waste sent to landfill increasing year on year, rather than it increasing due to poor practices. It is common, therefore, in situations such as this to normalise EPIs, so we might consider tracking the amount of waste sent to landfill as a ratio against a measure of production such as tonnes of product produced. Normalisation of EPIs provides useful information that will often help determine whether an improvement or decline is real.
Sources of Reference
There are several guides that are present that can assist organisations with developing EPIs. As I have already mentioned ISO 14031 is a guide worth considering. It might also be worthwhile taking a look at the Global Reporting Initiative standards, they provide eight separate publications in the 300 series that provides example EPIs for issues such as energy, waste and biodiversity. They are very useful for reasons other than reporting, such as developing EPIs for an EMS. You might also want to take a look at the UK government environmental reporting guidelines which provide a thorough approach to developing EPIs in the workplace.
Hopefully this post has given you a few ideas of implementing EPIs in your organisation. As we have seen if they are chosen correctly, they provide a quantified and accurate means to track environmental performance over any given time period.
John Binns BSc (Hons), MSc, MSc, MIEMA